It is no easy task for a mid-sized U.S. city to create the infrastructure needed to grow a robust entrepreneurial community.
Many argue that to be successful in such an effort, a city needs a combination of a high-profile university (or universities) and numerous wealthy residents willing to financially support that undertaking. And the reality is that many second-tier cities do not boast of both.
Nashville has multiple universities — highlighted, of course, by Vanderbilt University. And the city, with its music and health care industries, is home to a growing number of folks with deep pockets. The Entrepreneur Center holds court at The Trolley Barns and SCORE Nashville and the Tennessee Small Business Development Center (located at the Avon Williams Campus of Tennessee State University) are quality resources. Various venture capital firms and angel investors provide money to local businesses.
Still, Music City is not necessarily Entrepreneur City.
At least probably not on the same level as two of its peer cities: Austin, Texas, and Charlotte, N.C.
Keva Walton, senior vice president of member engagement, strategic partnerships and diversity for the Charlotte Chamber of Commerce, said the Queen City’s entrepreneurial community has benefited from strong assistance from corporate titans. He listed, for example, Duke Energy, which will offer a $25,000 cash prize in the November Power Up Chapter Challenge sponsored by the chamber.
“What we hear and see is the cultivation of relationship between the corporate and the entrepreneur communities,” Walton says. “There is some valuable benefit-knowledge that corporations have. Last fall we did an innovation exchange in which officials with the health care, financial services and energy sectors contributed.”
Walton says the fast rise of Charlotte’s entrepreneur class has been the result of a “collaborative effort.” He says the city has long featured many “key assets.” But it was not until they were aligned that results became more noticeable. Also, the Charlotte Entrepreneurial Alliance and, in particularly, Packard Place have been major cogs.
“Packard Place has become a physical place but there is no one entity to drive the conversation,” Walton says. “It is all of us. [For example], UNC Charlotte’s Ventureprise has been a key player.”
Relatedly, the chamber oversees a trip every year to a peer city. In 2011, 130 participants visited Seattle, a trip that started the chamber on a “journey,” Walton says, regarding entrepreneurism.
On the Packard Place theme, Adam Hill, who serves as executive director for the operation, says rapid progress is being made in Charlotte. For example, Packard Place opened in December 2010 with two start-ups and now has about 40.
“The entrepreneur community in Charlotte has been growing rapidly,” Hill says. “ We turned the light switch on. We house entrepreneurs in the same space and this allows people to see the growing movement.”
Hill says Packard Place, which offers about 90,000 square feet of space, should hit 95 to 100 percent occupancy in the next 12 months and will bring more space on line as need for early stage start-ups.
Dana Lumsden, a Partner at Bradley Arant Boult Cummings and managing partner of the firm’s Charlotte office, says the entrepreneurial communities in large “media capitals” tend to garner much more recognition than in second-tier cities.
“But Charlotte has a very robust entrepreneur community, particularly with the work being done at Packard Place,” says Lumsden, who advises companies on regulatory compliance. “In the last five years alone, I’ve seen a lot more discussion about entrepreneurism in Charlotte than I had the previous five years,” he says.
In contrast, Nashville’s entrepreneurial community is growing at a more measured clip, according to LeShane Greenhill, co-founder and CEO of Nashville-based Sagents. Greenhill says he has enjoyed various conversations about the local entrepreneur community with individuals who have come to Music City from similar sized cities.
“I’ve heard there is not a central depository for entrepreneurs to find legal help, accounting advice, concept evaluation and a stable cast of mentors,” says Greenhill, whose company offers a cloud-based application designed to find, connect and manage procurement opportunities across multiple industries.
Greenhill says that when talking to entrepreneurs — both local and out-of-town — two two-city groups of peer cities are the focus.
“There is the Louisville and Charlotte grouping, and the individuals in those cities might be surprised they can’t find the elements [in Nashville] I mentioned,” he says.
“Then there is the Austin and Denver group,” Greenhill continues. “[Entrepreneurs in those two cities] know Nashville is a little bit behind. But they know the one draw Nashville has is that everybody wants to be a part of something that is beginning. They want to be a part of building that next entrepreneur scene.”
Austin has already built such a scene, and many folks — and the media — feel the Texas capital has one of the three most vibrant entrepreneurial communities among America’s second-tier cities.
Preston Stewart,business information specialist with the Small Business Development Program (a division of the Austin Economic Development Program), says Austin benefits from multiple elements, including its reputation as a cool city that is receptive to young people. He lists Dell Inc., South by Southwest and Austin City Limits as having been huge drivers of entrepreneurism. And, of course, the massive University of Texas has played a major role, he adds.
“In general, we have a strong network of support for entrepreneurs,” Stewarts says. “We have several active chambers and smaller community business organizations. Our biggest challenge is sometimes helping people make sense of the Austin entrepreneurial scene.”
Stewart says that from 2000 to 2010, the number of small businesses operating within the Austin metropolitan statistical area grew by 26 percent.
“It’s been building for a long time and it exploded in the last decade,” he says of the city’s entrepreneurial community. “It’s a lot about momentum. We continue to push further. We constantly try to evaluate where we see the gaps. We do benchmarking when we can.”
Instead of looking to similar sized cities with quality entrepreneurial communities — including Charlotte, Raleigh-Durham and Salt Lake City — Austin entrepreneurs compare their city’s scene to those in Atlanta, Boston, Portland and San Francisco. Not surprisingly, Stewart says the local community feels it can hang with the entrepreneurial communities in Dallas and Houston.
“We had dozens [of accolades from the national media] over the last few years,” he says. “To be honest, we sometimes can’t keep up.”
Austin’s efforts, to some extent, parallel those of Silicon Valley in the early 1980s. That movement essentially was synonymous with the introduction of the IBM PC and numerous related hardware and software products to the consumer market. In addition, the Valley — which comprises the San Francisco Bay region — has a large population of young, educated and socio-politically progressive residents who embrace technology.
Similarly, Austin had Dell to drive its entrepreneurial scene, starting mainly in the late 1980s. And like with Silicon Valley, Austin’s population tends to be young, educated, entrepreneurial and tech-savvy.
“Austin likes to compare itself to the Bay Area,” says Jon Hockenyos, president of Austin-based economic analysis and public policy consulting firmTXP, Inc.
Interestingly, no more than four years ago, Austin and the Bay Area were connected via a mere two daily non-stop flights. Now there are many.
“That’s tangible,” Hockenyos says.
Nashville has often — in many areas — compared itself to Austin and Charlotte. Maybe for entrepreneurism purposes, comparisons to larger and more cosmopolitan cities could be helpful. Such an approach seemingly has worked for Austin.
“Another city for comparison is Portland,” Hockenyos says of the large Oregon city with its highly progressive and urbane citizenry. “It’s not necessarily in terms of entrepreneurism only. It’s about lifestyle and design of the community — the built environment and mass transit.
“Increasingly in Austin, the talk is about global completion,” he adds. “We recently had a delegation in from Toronto and the consensus is that Austin is a global brand.”
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